State insurance commissioner blasts Anthem for rate increase

California Insurance Commissioner Dave Jones took to the bully pulpit Tuesday to blast Anthem Blue Cross for a Jan. 1 rate increase for small employers as “unreasonable.”

Factoring in benefit reductions, Jones told reporters the average 12-month rate increase amounts to 10.6 percent for thousands of small business preferred-provider organization policyholders. A review of the filing showed the actuarial base was too high and the rates “excessive,” he said.

Anthem went ahead anyway.

Company officials see the situation differently. They say the average rate increase is 6.5 percent for the 52,396 members affected. Including benefit reductions — like Jones did — increases the hike to about 7.5 percent.

“We vehemently disagree with the 10.6 percent figure,” Anthem spokesman Darrel Ng said. The company also disputes Jones’ figures for overall premium hikes across its business.

State insurance regulators in California have no power to stop rate increases, even if they determine them to be excessive. Jones has backed failed legislative efforts to change that, but an initiative has qualified for the November 2014 state ballot that would change grant that authority.

Anthem is not the only health plan increasing rates, although Jones alleges Anthem’s are higher than competitors in the market when benefit reductions are taken into consideration.

Rate filings on the California Department of Insurance website show 15 filings that affect either individuals or small employers over the first four months of 2013. They include two rate cuts by Anthem and 13 hikes by a variety of plans that also include Blue Shield of California, Health Net, Aetna and Kaiser Permanente.

The proposed increases run as high as an average of 16.1 percent for a very small group of small employers covered by Health Net and 26 percent for more than 340,000 individual members covered by Anthem Blue Cross.

The underlying cost pressures upon which health insurance premiums are based continue to outpace both inflation and national economic growth, according to the California Association of Health Plans.

Some of the debate will be moot in a year, when Covered California launches a new state insurance pool for individuals and small employers — and further protections kick in under the Affordable Care Act.